Healthy women experiencing a straightforward pregnancy should be encouraged to give birth in a midwife-led unit rather than a traditional labour ward, according to draft guidance from an NHS watchdog.

The National Institute for Health and Care Excellence (Nice) also provisionally says that a home birth could be as safe as hospital for low-risk pregnant women who have already had at least one child, and that midwives should discuss all options with women in their care.

The proposed changes to the institute's guidance could affect hundreds of thousands of births, Nice said.

The watchdog currently recommends that women should be given the choice of where they want to give birth, but urges caution if a home birth or delivery in a midwife-led unit is planned.

It is revising its recommendations in light of new evidence, and a draft version of the updated guidelines has been published for consultation.

Almost three-quarters of a million (729,000) babies were born in England and Wales in 2012 - a rise of about 20% from 2002, Nice said.

Christine Carson, clinical guideline programme director for Nice, said: "Since we published our original guidance, more evidence has come to light about the benefits and risks associated with giving birth at home, in an independent or hospital-based midwife-led unit and on a traditional labour ward.

"We now know that these units are as safe as traditional labour wards for all low-risk pregnant women and are more likely to result in a better birth experience with less medical intervention.

"The evidence also highlights that home births are just as safe as other settings for low-risk pregnant women who already have at least one child, but not for women expecting their first baby.

"However, every woman should ultimately have the freedom to choose where she wants to give birth and be supported in her choice.

"We're pleased we are now able to propose more definite advice to help pregnant women choose the best option for them.

"We now want to hear what others think so that we can ensure the final, updated guidance will promote the safest possible care for women and their babies."

The draft guidance is welcomed by the Royal College of Midwives.

Cathy Warwick, chief executive of the RCM, said: " We certainly welcome the change in guidance. The evidence shows that for low-risk women giving birth in a midwife-led unit or at home is safe, indeed may be safer than hospital.

"Women also tend to have higher satisfaction rates and a better birth experience when giving birth in these environments.

"The Government have stressed that women should have a choice about where they give birth. It is at the heart of their maternity strategy and too often this choice is denied to women.

"To achieve this a number of things have to happen. The choices recommended by Nice have to be commissioned at a local level by clinical commissioning groups. There also has to be more investment in midwife-led care, in midwife-led units and in home births.

"Additionally, we need to ensure that midwives being trained get jobs when they qualify so that we have the right number of midwives to deliver these services.

"It is then that a choice that exists in theory will become a choice that exists in reality for all women.

"The RCM is also supportive of the Nice guidance on cord clamping. Again, it is ultimately about choice for the woman and her choice should be respected and supported."

The draft guideline updates recommendations about when a baby's umbilical cord should be clamped and cut.

Following a review of evidence, it says that once midwives have delivered the baby and administered oxytocin to deliver the placenta, they do not clamp the cord earlier than one minute after the birth of the baby unless the baby's heartbeat falls below 60 beats per minute or there are concerns about the cord.

They should clamp the cord within five minutes to deliver the placenta manually (controlled cord traction), if the final stage of labour is being "actively managed".

They should support a woman's choice if she asks for her baby's cord to be clamped and cut later than five minutes.